The repudiation of insurance policy by insurance company is not valid: Supreme Court.

Case title: Bajaj Allianz General Insurance Co.Ltd vs Mukul Aggarwal & Ors.

Case no.: Civil Appeal No.1544 of 2023

Decided on: 20.11.2023

Quorum: Hon’ble Justice Abhay S. Oka, Hon’ble Justice Rajesh Bindal



An accident caused irreparable damage to Mukul Aggarwal’s (Respondent’s) BMW 3 Series 320D. His insurance claim with Bajaj General Insurance (Bajaj) was denied due to a delay in submitting the claim, a failure to respond to insurer letters, discrepancies in accident descriptions, and the discovery of bloodstains in the vehicle. Aggarwal filed a complaint with the SCDRC, which ruled in his favour and required Bajaj and BMW to indemnify him for the car’s replacement under BMW Secure Advance. The NCDRC upheld the decision, dismissing appeals by Bajaj and BMW. BMW and Bajaj filed Civil Appeals with the Supreme Court, challenging the NCDRC’s decision.


According to sub-clause (i) of Clause (d) of Subsection (1) of Section 2 of the consumer protection Act, 1986, any user of the goods other than the person who purchases the goods is also a consumer under the Act.

The Commissions found that the insurer and the dealer were conducting business from their offices in Delhi, citing clause (b) of sub-section (2) of Section 17 of the Consumer Protection Act, 1986 . The National Commission observed that the State Commission, by hearing the complaint, granted permission to file it.


BMW’s counsel argued that the owner had no cause of action to file a complaint against BMW. The reason for this is that the insurer repudiated the policy. BMW was not liable unless the insurer was at fault. He claimed that the claim had not been settled under the insurer’s policy. He went on to say that neither the State Commission nor the National Commission found any flaws in BMW’s service.

The insurer’s submission is that the fact remains that the insured did not immediately notify the insurer of the accident. He pointed out that the owner suppressed material facts about the nature of the accident. He stated in the Forensic Investigation Report that blood stains were discovered on the car’s dashboard and driver’s seat, as well as beer bottles in the vehicle. As a result, he argued that there was every reason to reject the policy on the grounds stated in the letter of repudiation.


The owner’s counsel argued that because the State and National Commissions made concurrent findings of fact, this Court should not interfere with them. The learned counsel supported the State Commission’s reasons for concluding that the repudiation of the policy was illegal. They supported the challenged decisions.


The Supreme Court found fault with the Insurer’s and BMW’s services. The Court emphasised the importance of clear evidence in determining liabilities based on the insurance and BMW Secure policy terms. On the issue of policy repudiation by the insurance company, the Court stated that the primary basis for repudiation was a significant delay in notifying the insurer of the accident. The Bench did, however, note that there is evidence that the accident was reported to police. The insurer neither disputed the accident nor claimed that it was caused by the driver’s reckless and negligent driving. Furthermore, the insurer did not claim that the driver was prosecuted for such behaviour. As a result, the Court ruled that the insurer’s repudiation of the insurance policy was invalid.

The Court evaluated the compensation, assigning a specific amount to the insurer and providing a reasonable estimate for BMW. The Supreme Court granted the appeal in part, setting aside the operative portion of the State Commission’s Order.



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Written by – Surya Venkata Sujith


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